Newfi Launches Shared Appreciation Mortgage, EquityChoice

Wholesale Non-QM lender Newfi Lending announced EquityChoice, a new type of shared appreciation mortgage.

The product comes in response to record-high equity amassed by Americans since the pandemic housing boom. High rates are keeping that equity stored away, as many homeowners are reluctant to tap into it through traditional financing options.

EquityChoice gives homeowners access to cash with a below-market fixed interest rate, and shares in a portion of their future home appreciation.

Company leaders say homeowners don’t need to factor in additional monthly payments or worry about soaring rates when considering using the equity in their homes.

“Newfi has created a groundbreaking new offering that meets homeowner needs for liquidity by combining the benefits of home equity sharing options such as no monthly payments with a traditional mortgage,” said Steve Abreu, founder and CEO of Newfi.

“Our goal is to simplify the mortgage process in ways that gives financial control back to homeowners.”

Additional homeowner benefits include the ability to keep original low-interest primary loans intact and immediate access to funds without impacting their monthly cash flow. Standard mortgage loan terms and lender obligations are also built in to safeguard borrowers’ financial well-being, company leaders say.

EquityChoice also provides a new asset class for investors. It is REMIC eligible and capital efficient, setting it up to achieve broad market acceptance over the next five years.

“Homeowners’ needs have evolved over the past thirty years, but the mortgage industry has not offered new solutions since 1991. We’re excited to deliver an innovative new solution that gives homeowners a smarter and safer way for them to manage their overall wealth, while creating an alternative way for investors to gain exposure to the housing sector,” said Pat Doyle, President, Newfi Investment Group, and co-creator of EquityChoice.

The lender changed its logo earlier this year to better reflect its commitment to innovation and later launched a correspondent lending channel.